Chapter 274: The Price and the Gate

The voice-activated light in the stairwell went out. Lin Chen did not stamp his foot; he let the darkness swallow the faint glow on the screen. Leaning against the cold terrazzo steps, he thumbed open the attachment. The PDF loaded very slowly, like the shrill whine of an old modem dialing in. The term sheet ran fourteen pages, tightly formatted in standard Songti type. No pleasantries, no embellishment—only the skeletal logic of capital. He read down word by word. Pre-money valuation: eighty million, corresponding to fifteen percent equity. The numbers looked respectable, but Lin Chen’s gaze skipped straight past the valuation and landed on “liquidation preference” and “board seats.” A one-times non-participating liquidation preference seemed mild; but the appended clauses stated that if the company failed to obtain a Class II medical device registration certificate within twenty-four months, the investor had the right to require the founders to repurchase the shares at eight percent simple annual interest. The repurchase trigger was lashed tight to the clinical timeline.

He kept scrolling. Three board seats: one for the investors, one for the founders, one independent director. Balanced on the surface, but seven key veto rights were listed: annual budget overruns of more than ten percent, departure of core technical personnel, changes to the main business, external guarantees, transfer of intellectual property, any single expenditure exceeding five hundred thousand, and—major iterations of the algorithm’s underlying architecture. The last item was like a fine needle, piercing Lin Chen’s nerves with precision. The moat of medical AI was not in the interface, but in the allocation of weights for feature extraction. What the investors wanted was not dividends, but the steering wheel. He closed his eyes and broke the terms down into a logic tree. Valuation was the bait, liquidation preference the net, veto rights the lock. Zhao Qiming’s fund was not betting on a technological breakthrough; it was betting on a certain exit. In the eyes of capital, algorithms were assets, hospitals were channels, and human lives were clinical endpoints on a report. Lin Chen opened his eyes. The swelling in his left ankle crept up along his trouser leg. He did not rub it; he merely lowered the brightness of his phone screen, took screenshots, and saved them to an encrypted folder. File name: TS_V1_To_Be_Dissected.

At seven in the evening, the alley between the handshake buildings in the urban village was so narrow that only one person could pass sideways. The air was mixed with cooking smoke, the damp smell of peeling walls, and cement dust from a distant construction site. Lin Chen walked very slowly, bearing his weight on his right foot while the toes of his left only touched down lightly, each step like testing the thickness of ice. Back in the rented room, two freshly printed term sheets lay spread across the folding table. Su Man sat opposite him, twirling a gel pen in her hand. Outside the window, water dripping from the air-conditioner condenser struck the tin awning in a chaotic rhythm. After reading Article Seven, the tip of her pen stopped against the paper. “We can’t sign away veto rights over architecture iterations.” Her voice was level, but she spoke faster than usual. “During the transition from V1.2 to V1.3, we need to adjust the wavelet basis functions according to feedback from neurology. If the investors jam the iteration rhythm, the clinical data will go off course, and the registration certificate will be worthless paper.”

Lin Chen nodded, poured water from the thermos into a glass, and pushed it toward her. “What they want is risk control, not technical stagnation. We can concede approval rights over budgets and expenditures, but the technical route and clinical plan must remain in the hands of the founding team.” He pulled out a blank sheet of paper and drew three lines with a pencil. “First, keep the board seats at two to one, but the independent director is nominated by us and must be an expert with a background on an ethics committee at a top-tier hospital. Second, keep the liquidation preference, but add an exemption to the repurchase trigger for ‘clinical delays not caused by subjective fault of the founders.’ Third, change the technical veto right to ‘information rights plus a fifteen-business-day objection period’; if the deadline passes, consent is deemed granted.” Su Man watched him draw the lines and said nothing. She knew this was not negotiation; it was drawing boundaries. Cross the line, and the company would become a contract factory. Hold the line, and they might not get the money.

“Zhao Qiming won’t change the terms easily.” Su Man set down the pen and tapped her knuckles lightly on the tabletop. “His fund only has two slots left in this vintage. Investing in us is meant to build a benchmark in the medical AI track. What he needs is speed, not steadiness. If we hold too hard, he may turn around and look at competitors.” Lin Chen folded the sheet of paper and slipped it into his notebook. “Then we can’t drag this out. Before ten tomorrow morning, send over the revisions. Attach the full V1.2 logs from the demonstration room and the false-positive rate review report. Use data to buy room.” He paused, his gaze falling on the wall calendar. “Also, prepare a fallback plan. If the investors insist on the original terms, we start contacting industrial funds. The cycle is longer, but medical capital cares more about clinical value and has higher tolerance for iteration. The cash on the books can last another forty-five days—enough to get through one round of due diligence.” Su Man nodded and began typing. The cold light of the screen reflected on her face. There was no hesitation, only execution. Lin Chen leaned back in the chair and listened to the sound of the keyboard. He knew entrepreneurship was not writing code; there was no perfect syntax checker. Every compromise was a variable, every insistence a constant. All he could do was calculate the odds, then place his bet.

At one in the morning, the email was sent successfully. Lin Chen shut down the computer. His left foot was already so swollen it would not fit into his slipper. Bracing himself against the wall, he walked to the bathroom, turned on the tap, and rinsed his ankle with cold water. The skin was an abnormal dark red, veins bulging like old tree roots coiled around bone. He ignored it, merely dried it with a towel, then went back to bed and lay down. On the ceiling, water stains had bled outward, their edges blurred, like an unlabeled EEG topographic map. He closed his eyes, and his breathing gradually steadied. The phone beside his pillow vibrated once. It was not a reply from Zhao Qiming, but a text message from the secretary of the hospital ethics committee: Engineer Lin, a temporary preliminary review meeting has been added at nine tomorrow morning. Experts from the Provincial Health Commission have raised questions about algorithm explainability and require a supplemental multicenter control dataset. If it cannot be provided, filing will be suspended.

Lin Chen opened his eyes. The light of the screen stabbed through the darkness. He sat up, set his left foot on the floor, and the pain was sharp. He pulled out his notebook, turned to a blank page, and wrote: Data gap: 300 cases. Deadline: 72 hours. The pen tip tore the paper, leaving a deep groove. Outside the window, the dripping had stopped. The night wind slipped through the gaps in the security bars, carrying the chill of early autumn. He knew the door of the demonstration room had not yet been fully closed, and another gate had already dropped.